This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus gloom War, business finance, and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. It was a holiday shortened week for many, but that didn't make it any less busy. As we kicked off with a decisive victory for Donald Trump in the Iowa Caucuses. We got more big banker innings and a strong US retail sales report. Yep, we were all out shopping in the month of December. And we also got daily headlines over what some have described as escalating tensions in the
Middle East. This a main topic that was on the minds of the folks at the annual meeting of the World Economic Forum in Davos.
On that in Davos this past week, Robert Garrett, CEO of Hackensack Meridian Health it's one of the largest healthcare systems in New Jersey. Well, he's stopped by to give us a check up on global healthcare, including the role of AI.
It is everywhere.
Also this week a big deal in the chip space involving two companies that really are in household names, and yet the deal one of the largest in the last twelve months plus.
From bitcoin to back to work, We've got the five ETFs to watch in twenty twenty four, and a little bit later on we got Peak Ski co founders Andy Wirth and Olympic and World Championship gold medalist Body Miller on disrupting the ski industry.
Yeah, that was a fun conversation.
All right, all of that to come, We begin with the World Economic Forums annual meeting in Davos, where some of the conversations there help shape this week's narrative. This year's theme rebuilding trust, and they were asking leaders who were there. Will the coming year be a period of perma crisis or will twenty twenty four be a time for resolution, resilience and recovery.
There's some reason to look at the glasses half full. Maybe it's all to talk about a soft landing scenario and rate cuts, But on the other hand, is reported out in a Bloomberg Big Take this week, if the pessimists have their way, there are plenty of year ahead risks to get keep leaders awake at night.
That's for sure.
That story, by the way, a collaboration between Bloomberg News and Bloomberg Economics. Bloomberg News Global Economics editor Ben Holland joined us with more.
Yeah, we started from the point that the pessimists have tended to get things right in recent years, and so obviously after a few years in which we've had, starting with the pandemic, it was pretty clear to see all the things that could go wrong. And I think where we started was the two major conflicts that are still unfolding in twenty twenty four with no evident and in sight most of all them, add least which is dominating
our headlines every day. I think that was kind of the starting point for global.
Risks this year.
Yeah.
I think a lot of people, certainly if you would go back a year, did not see that coming. And at this point we are what more than one hundred days into Israel's and the Israeli gods of war. But the threat is not just within that region. Then it's a threat that is really concerns a wider, more global wide or more global involvement of this war.
Yeah.
So I think whenever you talk about a conflict in the Middle East. The vector by which people think that that's likely to affect world economy or that could in the worst case affect the world economy is of course via energy prices, and we haven't really seen that in the as you say, in one hundred days of the
conflict in Gaza so far. But the risk that oil markets have been worried about, of course, was that the conflict could escalate, and I think it's hard to say after one hundred days, even though it perhaps in fact did not escalate in the way that people fit, it's hard to say that the risk has gone any less. And when we look at what's been happening in the Red Sea in the last week or so, you could
actually easily argue that it's got more. And not only that, but in addition to the biggest risk of all Middle East conflicts, which is an effect on the world economy via oil prices, you now have a very clear risk of some kind of effect shipping prices also because we are seeing disruption too a very important trade route, and it's not really clear that anybody can do a whole lot about it.
Yeah, it certainly feels like, you know, every day we see the headlines, we talk about the Red Sea, we talk about you know, those giant ships, you know, pausing
or taking a longer route, a more costly route. But it does feel like as attacks seem to escalate, dare I say it, it does feel like we're just kind of waiting to see does it go truly the escalation route or does Folks somehow global leaders say Okay, we got to stop this before it just you know, takes off and running and we really are kind of in a third World war, if you will, even though some
might say that we already are there. Hey, I want to go to the FED because we just talked about it with our TV colleagues, the FED getting it wrong. It does feel like the markets are kind of pulling back from expectations of an aggressive FED sometimes, and we keep getting warnings from FEDS if they could get this wrong or could they.
The FED and any central bank can always can always get it wrong, of course.
Yeah.
So what we found interesting when we were looking at the risks from the point of view central bank policy particularly was the comparison between the US and Europe. I think where obviously, in both cases you've had very subessential interest rate increases the kind of policy that should slow down the economy, And in either case, has it really led to the kind of drastic slow down that you might have expected if you plugged in quite that big interest rate hike into the models.
And we kind of felt that there were.
Two different risks going on in the US versus Europe. And in the US it seemed that maybe a bigger risk was that just the thing didn't work, you know, it didn't slow down the economy all that much. It might actually start heating up again in ways that the FED doesn't like. And of course what we talked about with the Middle East conflict and to shipping costs or
energy costs, that could play into that too. And so you might have a risk that the FED that things it's done, realizes at some point in twenty four that maybe it isn't done. Whereas in Europe you seem to have kind of the opposite risk, which was a central bank that's done a lot, economy slowed down, but it did not come to a kind of juttering hope. But what if it's all still in the pipeline, you know, the famous long variable lags of monetary policy. What if
in Europe. That stuff is still yet to bite in a big way. That is what could lead to a sharpest slow down in Europe.
And twenty four hey Ben in the piece you guys mentioned this natural language processing model that captures FED speaker sentiment. This is cool. What does it show and how does this work?
It's a kind of linguistic analysis of what FED people are saying, quite literally with a waiting attached to the
various words that they use. It's based on news reports, but based on thousands of news stories that come out with direct comments from FED speaking because it's an attempt to gauge, you know, if you could, if you could literally measure their worst to see how that you know, whether they're tilting in the hawchesh or dubbish direction based on the use of certain keywords, certain kind of phrases that come into play.
What would it tell you?
And what it tells you I think is pretty clear in the chart and the story, which is that yes, they're pivoted, but the pivot has a long way to go before it actually gets into the area of you know, yeah, we're about to cut raids.
All right, Let's get to also one of the largest economies out there and we're talking about China.
Twenty twenty three.
We all thought, Okay, that's going to be the year China.
Comes roaring back.
It did not, you guys, note it still looks a little bit wobbly.
Yeah, the risk of the long running real estate crisis there, which of course in other countries like Japan in the in the nineties and the United States in two thousand and eight. I think it's on everyone's mind that, you know, really as they crunch can lead to a deeper financial crisis. Hasn't happened in China, and what you've had a disappointing rebound, but the risks this year, we think it kind of tilted to the downside in China and the selling point is not great anyway.
So we don't have time then to get to everything on the list here, but I want to give you the choice to go where you want to go. And what are audience watching and listening right now needs to know about the year ahead.
Well, you know, a couple of to try and end on a bright note here in the piece, we basically focused on the things that can go wrong, and obviously there's a lot that can go wrong. It was kind of interesting to look at a couple of coonomies where you feel like, you know, most things that could go wrong already have gone wrong, which is Turkey in Argentina, and both of them are still facing very severe challenges, but just the possibility that those countries might turn a corner.
There's been a long time incoming. In Argentina still that you know, their inflation rate is above two hundred percent and there is a substantial risk that it kind of takes off even from there. But after a radical change of policy and with some support from the IMFF, it does seem possible that they could turn the corner. This here in Turkey has also done a kind of you turn away from its very orthodox policies. It looks now
like things might be stabilising there. So that's let's highlight those as the kind of things.
Right, final thoughts twenty seconds.
Risks are risks, right, they may not play out, and we need to remember that, right.
That would be the best good outcome, I think, is if none of the bad outcomes.
Yeah, yeah, I'm.
Going to I mean, the guys are out of are the individuals in Davos right now are seeing the glasses half full of their feeling they're seeing a lot of resilience despite.
This list of risks.
Well, that's why, well said, Well said, Ben, thank you so much. We really appreciate Ben Holland, Global Economics editor at Bloomberg News on zoom from Washington, DC. This is the Bloomberg Big Take, which you can catch on the Bloomberg also at Bloomberg dot com slash Big Take, and you can read more of those stores and other big takes.
Always love it. It's a big think piece which we can.
Apply across a lot of great year ahead pieces.
A lot of risks.
Maybe cross my fingers, cross my toes, they don't come out.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, or watch us live on YouTube.
Well, we talk about it all the time, just how big a contributor it is to the economy, and we're talking about healthcare. Spending on health accounted for seventeen point three percent of US GDP and twenty twenty two for a total of four and a half trillion. That's according to the centers for Medicare and also Medicaid services Tim.
Yeah. Last week we got the numbers from the BLA self Care adding thirty eight thousand jobs in December second and hiring only to the government.
A lot of.
Money, yeah, a lot of people.
Yeah.
When it comes to healthcare in the US.
We got a lot of questions. So we think about how will AI transform this. What about the role of private equity in the hospital and healthcare space? Will it cut costs and most importantly improve patient outcomes. We've got a great guest to really take a big view perspective on this. Robert Carrott is chief executive officer of Hackensack Meridian Health. I know the system well, a New Jersey based hospital network eighteen hospitals, seven thousand doctors in more
than five hundred locations that provide care. He is also chair of World Economic Forum Health and Healthcare Governor's Community, and before he heads over to Davos for next week, he joins us here in the blueberg A Directive Broker studio. Happy New Year, Nice to have you back.
How are you I am great?
Happy New Year to both of you.
Great to be back to It does feelk it feels good to be back. It feels like we're kind of back to normal, as they say, because.
We all just get COVID once a year, and you know COVID.
For my routine, right, it is kind of weird.
So let's start with Davos.
You're getting over there, you're heading over there. What's top of mind for you?
So you know, as in this new role as chair of the Healthcare.
Going what does that mean? What exactly is that?
So what that is is we convene healthcare stakeholders and we decide what the priority topic or topics should be. And as the chair, I have to really convene that group. There's a steering committee, and then I have to actually chair the meetings that actually take place there. So this year, when we thought about all of the topics over the last few years, there was health equity and the inequity that exists in you know, underserved countries versus the western countries.
I think like a thirty year gap in life expectancy as one example. Then we thought about healthcare access and not having equal access across the globe to healthcare and healthcare programs. We thought about climate change and the impact climate change has on health, and then we thought about moving healthcare outcomes and adding more value to the healthcare system,
all of those. If you think about all those four topics, they all are going to be so impacted by what is really the most profound innovation of of our our.
Don't say it.
Don't go there, don't go there, I won't.
I'm tempted everything bitcoin bitcoin, Yeah, yeah, health bitcoin Is that what you're going to say?
You know?
Okay, yeah, the way they say it's the penicillin of our generation. But you know what, So so we thought AI really did make sense because it really wraps around all four topics. So the Steering Committee, we had those discussions, they agreed, and so what's going to happen at DAVOS is we're going to have a discussion from some of the stakeholders pharmaceutical company CEOs as well as device CEOs, the device maker CEOs, healthcare systems CEOs as well as
insurers all around the table hearing about AI. What their their take is, what where the impacts are going to be, what the pitfalls might be, what safeguards we have to set up. Then we're going to bring in the policy makers. So we're going to have health ministers from different parts of the world come in. We're going to hear from
their perspective. Then the policymakers leave the room and the governors get back together and we break out into small groups and we decide what our action plan is going to be going forward. And we leave there not just with what the problems are or what the challenge, what are the solutions. And I'm committed as the chair to meet once a month following Davos. So it's not going to be something that's going to be put on the back burner till next January. It's going to be talked about.
Okay. So you've thought a lot about AI and healthcare, help us understand I mean, I think a lot of people have experienced with chat GBT and understanding what generative AI can do. But apply that to healthcare space for us, and if you think about the world that you want to see in five to ten years, paint that picture for us. What does it actually look like if AI has helped healthcare?
Well, the first thing I would say, tim is really identification of disease earlier. I think that really probably will be the most profound impact. And we're already seeing some some case studies and some pilot programs that are indicating some potentially some some breakthroughs there. You know, at Hackensack Meridian as an example, we have we have a pilot going on now that is identifying stage three kidney disease earlier.
And that's that has some profound impact because if you can really identify it early enough and apply some prevention.
But how does it how does it do that?
Like, well, the technical pieces through through algorithms and patient data, they're able to.
So basically the correct me if I'm wrong, the patient will come in and be asked a series of questions and the answers to those questions would determine, would go through some sort of algorithm and.
And come back and say, Okay, this patient, you know, in three years from now is likely to have you know, advanced kidney.
That's interesting because I a doctor could do the same thing right.
Well, they don't always have all the tools at their disposal. This could aggregate imaging, it could aggregate patient data, family history, demographics. It's just a lot for a clinician to really do so.
Almost like having a massive spreadsheet and putting all the endpoints and from different sources and just saying almost like a probability study, if you will statistically and say you're more likely to have these problems.
Another good example, you know to your question, tim is in radiology and imaging. So a radiologist has to read an average radiologist in a given day has to read like one hundred and fifty scans through AI. They're able to then tell the radiologists these three or five need priority based on based on the patient's history, the data in the medical record, and the scan itself. You need to pay attention to these because they may need treatment
earlier on. So that's really that's been really really helpful. When I think about AI in the future, I think about some of the clinical outcomes that can approve. There's also the efficiency side too, which.
Is hang on for a second, because I want to
bring one element into it. Just because we have a headline crossing the Bloomberg, UK Prime Minister rehis SUNAC authorizing joint military strikes with the US against the Huthi rebels in Yemen, and his cabinet approved, according to a person familiar with the matter, as the Allies looked to deter further attacks commercial vessels in the Red Sea, so his cabinet approving the decision on a conference call today air strikes possibly as soon as later in the evening, according
to those familiar. So we continue to see heightened tensions in the Middle East. The reason I wanted to jump in, Robert is that I do feel like there's going to be a lot of conversations in Davos about risk that's out there.
We've got two big wars. You talk to geopolitical.
Strategies and they say, actually, there's about one hundred levels of kind of some kind of outbursts or activity, smaller ones attacks around the world. Some say we're already a world at war. So when you look at the healthcare issues that, yes, are so important to ministers, how are they going to think about prioritizing that the money, the need, the efforts when you've got some really serious situations going on right now.
I mean it's going to be it's going to be a challenge, no doubt, for even in the US. I think in terms of, you know, our budgetary priorities right right.
And even after coming off of a global pandemic that shut the world down. It's interesting how things can be put to the side.
But you know, if you think about it, you know, just in terms of even climate change and its impact on health. I mean, that's going to continue to get worse and worse. I mean I saw a statistic just the other day that I think between the years twenty thirty and twenty fifty, two hundred and fifty thousand more people each year will die around the globe because of climate changes impact on health and healthcare. So we can't ignore those problems as we have these these geopolitical crises out there.
But it does make it harder right to make countries and ministers to kind of get their initiatives.
Absolutely, and that's why you know, our voice as as a healthcare provider has to get even louder and say, okay, you know what, we understand your challenged and you have you know, these immediate issues, and there's a war in the Middle East, and we have Ukraine, and we have all these other situations out there, but we have to we can't ignore everything else. I mean one of the one of the.
Just about thirty seconds and then we'll come back and talk more.
Yeah, just just quickly carel One of the lessons from COVID was that too much was probably put on that back burner, Like as an example, in healthcare, people people didn't come in for their their screenings, and you know, we're seeing higher rates of cancer, higher rates of cardiac disease,
higher rates of diabetes because of that. So I think, what's what's what the lesson learned for me is, Hey, you know what, We're always going to have some crisis, but we need to be multifaceted and we need to pay attention to multitude of issues.
One thing I want to ask you about money in hospitals. We've done a lot of reporting about it. Private equity owning about thirty percent of for profit high hospitals. A lot of them are in rural areas of the United States.
You guys are a nonprofit, right correct?
What's the difference and what advantages do help me understand being a nonprofit hospital.
Nonprofit hospital, you are tax exempt and your you have a mission to serve your communities. You have to have a board that's representative of those communities, so you don't have you don't have stockholders or shareholders that you have
to to report to. In any margin or any profit that we make as a non for profit gets really reinvested in the in the health system, whether that's through capital investments to improve infrastructure, or new programs or services, or our people, our thirty six thousand team members.
So what do you make of all the money that is going into the for profit hospital system? Because you've seen some of the horror stories we've reported on it here at Bloomberg, good or bad?
You know, I think it's it's a mixed bag. It's how I would put it. Let me let me explain that I think it's in on the good side. Coming out of COVID, so many hospitals and even in health systems were stressed, particularly in rural areas, and they would have closed if it wasn't for maybe some some for profits or private equity coming in and and helping to bail it out.
You know.
The problem, of course is you know, where where, what's what's the mission, what's the where's the where's the priority? I do think that private equity is is probably here to stay in health care for for some period of time. So I look at it as if it's if it's coming to my market, coming to New Jersey, private equity companies which they have, they're gonna they're gonna be there
with or without Hackensack Meridian Health partnership. So I actually am looking for ways that maybe we can partner and maybe yes, so maybe there are some joint venture oportunities where our mission still will stay true, but we'll be able to provide some services and programs and have a partner that can help us provide them. So one example of that is we recently announced a partnership with a company called One Medical, which is you guys are probably
familiar with them. They're part of the Amazon On network. They were coming to New Jersey again with or without Hackensack Meridian Health. They are a group of primary care providers. We do have a shortage of primary care physicians in New Jersey, so we thought it's best to partner with them to make the One Medical Group part of our
medical group at Hackensack Meridian Health. And we're able to expand primary care coverage and we're going to be opening up new primary care centers throughout New Jersey with One Medical. So that's an example where I think it can be it can be positive.
Do you worry though, that the interests of a private equity firm aren't necessarily aligned with high quality patient outcomes?
I do do tim, and that's why I think that you know, where wherever possible, if there's ways that we can partner and keep the not for profit mission in healthcare, I think that's that's that's positive. Now, of course, you know there's going to be give and take if you if you do have a true joint venture. But we would only find I mean, from our perspective, we would only want to partner with UH with a company that shares our values and our mission. But yes, I'm basically
you know, unchecked. I think that private equity may not necessarily have the same interest as a not for profit health system.
When you look at the data, which ownership structure has the best patient outcomes?
I still think the not for profit hospitals and the not for profit health systems have the best patient outcomes that I that I've seen, and that that's patient quality and patient safety data. Now, maybe from an efficiency perspective, some private equity and some for profits do have a you know, a decent track record, so they're let the stay might be lower, their readmission rate might be a lower,
and those are those are important factors. But you know what I consider most important are you know, quality and patient safety outcomes.
You know when you you talked about in New Jersey that there's not enough primary care doctors, and I do wonder I'm going to be a little crazy, But are we getting to a point where it feels like we keep talking tim right with guests about shortage of healthcare workers nurses. We've been talking about that for years, like a little bit of a hunger game scenario where where it's going to be really rough to find the care and the right people that you need to do.
I feel very dust in New York.
But still the doctors who I know are are so burned out. Yes, and they're not. They're early in their careers. Yeah, the work that they do is so important, but they're not. It's not like you know these other jobs where people, oh, now they only have to go into the office three days a week. Now your doc, you have to be on site, you're on call on weekends. Like, yes, their compensation is good, but it is tough work.
The burnout actually got much worse as a result of COVID. So we when we've done our surveying, we see that, you know, with doctors and nurses, but the statistic nationally is one out of five nurses, as an example, have left the profession since COVID And what's even more scary than that is one out of three in recent surveys are saying they're seriously thinking about leaving the profession. So we already, as as Carol said, we already started with
a nursing shortage. The one thing that's common to doctors and nurses in terms of burnout is they are burnt out and frustrated with all the administrative tasks that they have to do that take them away from direct patient care. So that's where technology will come in.
When does it come because we've been talking about why can't I just walk in with a card and here's all my information, here's all my latest tests, and just use that. You know, hop it, you got it, and it gets updated. It Absolutely maybe that's what we should create.
It absolutely should be that way.
But I'll tell you one.
Technology then just about forty seconds, okay, one technology that is coming into fruition now that we're doing a hacken second Rarny we're piloting it's going to be rolled out and that's virtual nursing. So through remote connections, virtual nurse can help the bedside nurse and they can do a lot of the administrative tasks, the things the charting, the admission and discharge charting that needs to be done, which frees up the bedside nurse to spend more time with the.
Patients actually care for the patient.
Actually, and we're doing that with physicians too, where they're able to spend more time with patients. That's that to me, should be the major focus.
Well, a million more questions we have, Tim and I really get into the healthcare space, lots of things.
So hopefully you will come back soon.
I sure will.
We would love to have.
A safe trip to Davos. Thanks very much well Robert Garrett, and good luck with everything. Robert Garrett, Chief executive Officer of Hackensack. We're Ridian Health, as we said, of World Economic Forum, Health and Healthcare Governor's community.
This bloom you're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
I'm putting all my eggs in one basket.
You know, when we think about baskets of stocks, we.
Used to think about mutual.
Folks, we did, but alas no more.
Now we think about ETFs. And as I mentioned earlier, Carol, this year's already a huge year for ETFs thanks to last week's SEC approval of eleven This spot, well, we get approval jefs, we did.
Lash text sarcasts.
We got approval you know, via tweet that ended up not being correct. I don't know if can't remember that. What a week it was, and then the next day the actual approval came. But there's so much more to ETFs than the shiny new bitcoin ETFs.
Yes, indeed, Unfortunately, the team that covers ETFs at Bloomberg Intelligence, led by senior analyst Eric balchunis who hopefully got some sleep over the weekend, while that team, led by Eric whittled their global list of two dozen picks down to just a handful.
The story featured in the year Ahead issue of BusinessWeek magazine, which is available now on newsstands, on the Bloomberg Terminal and at Bloomberg dot com slash BusinessWeek. This story, by the way, written none other than Bloomberg BusinessWeek editor Joel Weber. Joel's here in the Bloomberg Interactive Brokers studio with us. Also with us is Eric Balchunis, senior ETF analyst for Bloomberg Intelligence. He joins us on zoom in Philadelphia.
Joel, if you know how to write a story?
Yeah, it's amazing. Come on, you have time. Jeez, you have time for a story? Oh, come on.
So Eric and I co host this podcast and we've been doing it for years called Trillia.
You lovet we.
You know, it's just this thing. It's an er I think it's Eric's theory of everything. Like if if you could kind of like put it, put the universe into one thing, the ETF would explain Eric and investment investing in all kinds of other stuff. That's what working on trillions with him for me has felt like. And so it becomes a really interesting way to kind of like think, look at finance and investing and there are there's just
more and more interest in it. We named it Trillions because every year there's more trillions that go.
Into these things.
You can still talk about mutual funds. We actually make time occasionally on Trillions to do so, uh, and we also do this episode every year that we have not had a chance to talk about yet. And if you're if you'd like to listen to the whole thing, you can do so wherever you listen to podcasts. But for the year Ahead issue, I took that conversation and kind
of whittled it down to just a handful. And while we were first talking about, you know, we didn't have an approved ETF for bitcoin, for spot bitcoin, and then last week happened and it was just like we got to talk about this with Eric a little bit as well as some of these other ones. So Eric, you I quote you in the story because you say, by
what march. By the end of March, we're going to know who the winner of the race is sec led a lot of ETFs out at first, who's the early who's got the early lead?
Okay, So I've separated the ten launches into what I call the Newborn nine and GBTC because it's different being a newborn in the ETF world, Joel. As you know, we called the terodome. It's a tough industry, so being a newborn is a different playing field. GBTC was a trust that existed, had thirty billion dollars in assets and a bunch of volume, and it converted into an ETF. So it came over with like ammunition, right, and all
kinds of supplies into the tarotome. So if you if you look at all of them, GBTC still has the most assets and volume, but of the newborn nine, Blackrock, no shocker, is in the lead. Fidelity a close second arc bit wise, you know, jockeying for the third position. But a lot of them are doing well, Like if you look at the volume of even like the least traded one, which I believe is the Wisdom Tree, it did six ten million dollars in the first two days. That would be a big hit, a big day for
any regular new ETF. So a lot of them has traded over ten billion dollars in the first three days. Unbelievable action in these ETFs. But Blackrock looking like the early favorite to be sort of the GLD of bitcoin, but it's got to overtake GBTC, which again came in with all this assets and volume and still has more.
There's a story though on the Bloomberg that talks about investors pulling over half a billion dollars from the gray scale Bitcoin trust in the first days of trading as an ATF.
Is that significant or how do you read that?
Eric?
Yeah, so this is a big situation. So the Newborn nine, all the volume is inflows pretty much because there's nobody with shares to sell because they didn't exist, right. So the GBTC, however, are people who probably want to get out. Now that's said, you have to take a tax sit if you want to get out. So I don't think all twenty six billion as it stands now we're going to get out. But there could be some people who
want to get out take the tax hit. Now it's a long story short, but they can't go right into the new ETF. So that's why I think a lot of the new funds into the newborns are new money, some maybe GBTC refugees. But over time, I do believe GBTC will be like a slowly melting ice cube and the Newborn nine will build up and at some point they'll probably be it. They'll both settle a little bit. But there is an interesting dynamic of play that you
don't normally see. And so if I had to guess, I'd say gbtcc's you know, four or five billion of outflows in the first couple months and then kind of settles down.
Isn't it bigger than an ice cube? Though, it's like more like a glacier.
It's a glacier. Yeah, twenty six billion. I mean I believe that makes GBTC like the top three biggest holder of bitcoin on Earth. So yeah, it is total glacier.
Glacier changed.
Yeah, yeah, hey, uh sorry taking over the show, guys, this is a trillion podcast. Eric, I got a question. I'm curious if you look at the eleven different uh spot bay ETFs, should they all have the exact same performance every single day because they're tracking the exact same thing, like v O O and S P Y for example, that track the S and P five hundred. Shouldn't they have the same performance?
Yeah, it should be very close. The only thing you might find difference this is what the premium discount the price to the Navy. There's been like, I don't know, a thirty basis point swing between them, but again these are minor points. We were a little worried that the price in the NAB would be a little further apart, which is a sign that arbitrage and the mechanics of the ETF were more difficult because you can only do
cash creations. Long story short, everything looks pretty good. So the dollars you buy it at, like I think, ib ibit start at twenty five dollars. Another one might be trading at fifty, but the percentage day on each that it changes each day should be pretty much lining up minus ten twenty BIPs basis points.
You know, the other thing that I wanted to ask you about is trading volumes, because I thought that was a really interesting insight. Here you said, don't don't look at you know, assets under your management, and obviously GBTC is representated of that. But why are trading volumes the thing that you all are watching as you evaluate these new newborn nine.
Yeah, because you need two things for a new category to have long term growth. You need volume and you need low fees. These have both because we already saw the few war breakout. You can get them all between twenty and thirty basis points even before they were approved, even before if few war happened before the race even started again, wild stuff. The volume is crucial because when you're an investor, an ETF investor, ready, advisor and institution.
Volume is like a party with people there. No volume is like someone who invites you to a party, but there's nobody going. And it's just the general way does You don't need volume to buy an ETF, but people just like to see liquidity. And so when liquidity forms around these ETFs, and it's hard because it has to grow naturally. Assets you can just shove in there, but volume only grows in nature, and so it's harder and
more covetive. But once you get liquidity, you get more liquidity because liquidity attracts the bigger fish because they like to go in and not have impact costs. So as you get more and more liquid you get bigger and bigger fish and more and more liquidity. And I think the volume the start that they're off to is really really good. It shows that you will find a comfort
level to any investor pretty quickly. Again, I got the low fees, I got the liquidity, and I'm off and get this stat I just ran the numbers of the five hundred each launched last year. These bitcoin ETFs are are already averaging three times. Would all five hundred of those traded today. So again the numbers are just outrageously high for these products.
Okay, so do you want to keep talking about bitcoin ETFs or do you want to talk about it?
Let's move on.
Theyfe words, there's amazingly there are other things.
Interventions are coming from me. I know it. My friends, I can hear them talking about my back.
Okay, I want to talk about the small caps ETF CALF and why that's been an interesting one that stuck out to you.
Yeah, because small caps were left behind last year and honestly a lot of the last decade. And here's this small cap ETF CALF that did better than the S and P last year.
So that just blew my mind.
How can a group of small caps actually beat the large caps? And the way they did it was they looked it's a ETF that looks at cash flow, and why looking at cash flow you get to more quality small caps, you get to the quality factor. And the quality factor was the best of all the quantitative factors last year, so it was enough to lift it above large So I thought it was interesting. Also, the CTF has seen flows for the past forty four months. It
is decimated. The Russell two thousand which is its index. Like I said, it beat the large caps, so you know it's decimating the small caps in general. And I think when people think of small caps this year, the big word on the street is it's time for them to play catch up. Well, here's some that already are off to a good start, so we wanted to look
at it. We also want to know if it could keep these flows going, because these kind of flows for an ETF, it's like Indy like not a Big three, are really unusual, and so it was also an indie feel good hit of last year, So that's why I chose it.
Okay for my transition to the next ETF, I want to bring up a news story that was just published in the last fifteen minutes or so. Blackstone's defaulted NYC office loan is for sale at a fifty percent discount. Right now, we're certainly seeing some stress when it comes to Ker real Estate. As the return to work, despite Joel's all of Joel's best efforts to get everybody in the.
Office, I'm going propaganda campaign.
It's working for me.
Matt Uh.
There's a way to bet. There's a way to bet on returning to work. Eric how do you do that with a desk? Is the ticker that makes sense?
Yeah, this was a classic thematic ETF. My colleague Athanasias chowse it. So this is the Van Neck office in commercial reate ETFU. And basically this is a play on return to office. Commercial real estate has really lagged the real estate stocks in general or the index for real
estate stocks. So here you have a laggard and you have a trend of like all these companies wanted to feel back in the office, and so you know that we're interested to see if this thing sort of plays catch up, because even if the real estate index is flat, if this plays ketch up, you get a bump. Plus, it was a novel way to slice and dice the real estate market. So it's got Boston prop parties. Uh, Vernado are the top two holdings, and a lot of people use Vernado as sort of the proxy already for
the return to office. So that's the top holding, so you get a lot of that stock.
In there as well.
I think it's just interesting, Like I can't speak to the Blackstone story necessarily, but there has been this perception that, you know, commercial real estate is down and out and no amount of rto can help it, but like slowly but surely, like there's at some point it becomes like, wow, maybe this is a contrarian investment opportunity. And what's amazing about that ETF which is brand new. It's like ETF can take a whole trade and just like package it into a ticker that you can trade.
Like a like a stock if we get a lower rate environment. So it's incredible, right, and make it much easier for this these firms.
Yeah, yeah, Okay, here's another interesting one, especially off of last year where you had this Magnificent seven and the tech companies just ran away with it. Eric, what is Afanasios Uh put forward as a as another way to think about tech perhaps in twenty twenty four.
Yeah, So this is the Investco SMP five hundred equal weight Tech RSPT. So equal weighting is a way to sort of like take out any kind of imbalance in your index, and so people like it. Whether it's the SMP equal weighted, this is Tech equal weighted. So you get all of the big Magnificent seven, most of them, but you get them at one percent or two percent weighting each, so you get a little bit more of an overweight to the tech stocks that haven't done so well.
So overall we're calling this sort of like the methadone version of the cues, right, And there's many.
Ways to do this.
Many people are figuring out how to get off of the sort of reliance on these seven stocks, yet they want to stay invested in equities. So we've got NASDAK covered call is a way to do it. You've got equal weighting is another way to do it, midcaps or another way to do it. So we think there'll be a movement of flow was away from the market cap weighted indexes a little bit this year to these types of less magnificent seven up ETFs.
Still get the tech but just you know that goal waiting kind of makes it all fat well obviously, Yeah, and then.
Oh, I mentioned if we actually get a FED that cuts rates. Here there's a treasury play here.
Yeah, this is TUA. This is designed by hedge fund people who start a company called Simplify, and it's I like it because these products are really interesting. This is almost like five times leverage short end of the curve. So because you're short in five it's not that much, but it's a it's a it's a kind of a strategy that you might find pimp Goo doing for institutions
or a hedge fund. Two is the ticker, and this company has gotten a lot of actual institutional investors, which is rare for a small company, and so I like to highlight it because a lot of ETFs they don't just package different asset classes, they package like people. I mean, these are hedge fund brains designing funds. And TUA is their biggest hit so far. And if the rates fall, all this should pop.
Hey, Eric, make sure to tell your friends and family you talked about stuff today other than bitcoin et apps.
Okay, my name is Eric.
Clip. Hopefully they they turn it to a clip all four it to my friends.
Okay, good, you definitely sound like I got sleep, so really good stuff.
This is so much fun. The two of you are pretty you know, we should do a podcasts.
You know, it's called tillions.
Podcast about GNIS and of course Jill Webber. This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app or watch us live on YouTube.
Chip design company Synopsis screen to buy software developer Answers for about thirty four billion in a cash and stock deal, marking one of the largest deals announced worldwide in the past year. I just want to point out that Answers shares were down five point five percent today, Synopsis was up three percent.
Yeah, maybe because the deal Francis came in below prior reported levels. That's according to some ann lists who we spoke to here at Bloomberg News. Secondly, Carol Advanced micro Devices AMD shares rallying out performing the socks a big time, the chipmaker trading at its highest in more than two years, as Barkley's raised its price target on the stock to two hundred dollars from one hundred and twenty dollars, seeing AI as a primary driver of growth.
Basically saying it's not just about Nvidia, because maybe they can't do it all.
I do want to point out that's pretty happy about that AMD.
Number one gainer in the S and P five hundred and the Nasdaq one hundred. All right, so let's get into it with Bloomberg News Managing editor of Technology and Global Cybersecurity here at Bloomberg News is Lindawan. She's here in our Bloomberg Interactive Broker studio.
A lot going on. Let's first talk about the deal.
These are not companies that I feel like when we talk about Sami's do we typically talk about these two companies.
Tell us about them and what we know.
Nobody knows about these companies outside of these walls.
Okay, So can I just say I'm so glad you said that. What I'm like, Okay, this is a thirty four billion dollar deal, and yes, there have been mumblings about this over the past week or so. Yeah, and I was like, I should know about the This is a big deal.
This was sixty one percent yea last year.
By the way, that's right, It's a good gainer. I mean, there's a good reason.
Right.
So Synopsis owns this very specialized part of the chips supply chain, which, as you know, is critical to the world. Chips are in everything. They're in televisions, they're in refrigerators, they're in cars, they're in like AI compute, you know. And Synopsis doesn't make the chips. Synopsis doesn't even make the chip machines that make the chips. Synopsis makes the software that flows into the machines that then makes the chips.
And there are very few companies that are in that space, so they already have a really good market share in there. And this investment, this thirty four billion dollar deal, what that does is it increases their stack, so to speak,
in the technology world. So they're not just designing the software that makes the chips, but they're able to now integrate this company ansis that builds models that allows men manufacturers of everything from cars to like aircraft's defence devices and military equipment to model how that equipment is going
to be used in the real world. So imagine taking this like chip design company and merging it with this modeling software, and you have like a very powerful combination that can go after even.
Bigger market people one stop shopping. It feels like that's right companies.
Yeah you need your chips, Carol, you know where to go, right? We do you do all your chip shopping there?
Yeah?
Last time I went chip shopping.
But it's really it's well, you know, it's funny. I love the supply chain analysis function on the Bloomberg and ansays, I mean customers are Caterpillar, Boeing, Rose, Royce, Lenovo, HUAWEIH, the military, like all of them. Right, And then I'm looking at Synopsis, and I'm looking at a lot of companies that I don't actually know.
Oh, well, you just you just mentioned a M D m D all the all the major chip manufacturers of the world are going to use a contel like Synops Intel.
That's right, and Ancess.
Now I see that a customer, they have a.
Song relationship with each other. What they would say, and I think they said it during their call earlier this morning when they announced the deal, is that this is like years in the making, like they have been using each other's technology for quite some time.
Regulatory problems, regulatory issues, right, because we're interesting. Synopsis rallied, which was the acquirer, which is not what you typically see, and then answers as the target went down.
Both moves are counterintuitive to some extent, exactly what you mentioned, which is the fact that like the price it's going for is less than what the market had expected. There were some reports, not from US, there were some reports out there about the fact that ances could end up going for like four hundred dollars per share and ended up going below that. So that's one reason. But another
reason is exactly what you said. So another reason, of course is the regulatory concern over having these two companies merge together. That's a pretty powerful market force, and whether it gets past the CFTC and other regulatory h we don't know. And then there's the geopolitical pressure of China.
Right will China, a big consumer who has a say in these kinds of mergers, even if they're two American companies sign off on a deal like this that would create a powerful company within here, you know, within these bounds.
That's surprising to me. Why would China have a say here?
It's super surprising. I didn't learn this until like another deal that involved two other technology companies ended up getting ended up falling apart earlier this year. China is a major consumer of all things around the world because it has huge buying power. It actually has say, an influence and approval processes in place for mergers of companies that serve the country. That's interesting even if they're outside of the country.
So I did the FAGO function on the Bloomberg terminal literally FAGO, And what you can do is you can pull up the financial analysis by geography and you can see that. In fact, for Synopsis, at least fifteen point two percent of the company's revenue in twenty twenty three, a fiscal year ended in October, came from China.
That's exactly right. And actually, in an interview with Bloomberg Television not too long ago, Synopsis even said the then outgoing CEO of Synopsis said we would be selling even more to China. China would represent an even larger share of our market if it weren't for the restrictions that the US has placed on exports of chip technology and chips themselves to that country.
And it doesn't look like Ansis gets a significant portion of revenue from China at this point.
It's not, but it will, yeah, right, So once it's a part of the company, I mean for Synopsis, it opens up a ton of different markets for them, right that they haven't already played in. So I don't know, net, how are you thinking about this? Is this likely to happen or we're gonna have to be patient or I don't know. How do you think about it? As an analyst? I know you can't say yes or no in terms of it's going to happen, But.
So hard to call whether it's actually going to happen. But I'll point you to two things. The one, there was a very large murderer in aviation today that faced some anti trust pushback.
Talked about right right.
But on top of that, I will also point you.
To because they were concerned about anti competitive Would this be anti competitive?
That's the question, right and and they raised that as like a potential concern as part of their conversation today with investors. But the other thing I'll point you to is the estimated closure closing date of this deal is the first half of twenty twenty five in the in the market's mind, that just points to the fact that they are anticipating a potential You.
Never want a deal to take a year to close. I mean even from selling a condo. You know, somewhere in the in the US, a realtor is going to say to you, let's get this thing closed as soon as possible, Bee, because the longer we wait, the more this deal can fall in my hand.
Yeah, we do have an election here in November.
Are you raising your hand because you want to talk Carol?
Yeah?
Okay, is it the expectation that about that election we'll get through an election, we'll have a new administration.
Is that part of it.
That's an interesting strategy. I hadn't even thought about it. Will we be ushering in a different c OFDC that is more like merger friendly? I don't know. It's not like the Trump administration was.
Both of them had pushing in terms of China, but you never know, right.
Yeah, that's a dangerous game to play. If that's the reason why they're scheduling the closing for first half of twenty twenty.
Five, I don't know. It's just weird. It's a long time. Uh quickly, can we move?
Yeah, go ahead, Can you can talk? Yeah, permission granted, I'm giving you permission.
AMD number one gainer in the S and P five hundred, the Nasdaq one hundred.
I loved what.
Barclays had to say, and part of it was I lost all my notes. But basically and video, yep, it's been the chip company we talk about when we think about AI, but basically saying maybe they can't do all of it, Like the ecosystem that AI is creating, that you're going to need more players are shaking your head.
It was always a crazy phenomenon to be that only in video would enjoy an AI bump. It was so because we would throw all these other chip companies out there, like, hey, remember AMD, Remember you know all of these other companies that also and for some reason in video was just eating up all that. I mean, they have first mover advantage, but first mover advantage only takes you so far. At some point, others crowd that area and you have to
figure out how to continually innovate. And you just had AMD like come out with this new and video chip rival right like it was only a matter of time before everyone woke up to that. I'm just like a little surprised that it took that.
Barkway said, the desire to have a second source what overwhelmed difficulties for the software ecosystem. Is there anybody else in addition to AM do that you think we should be watching in terms of the chip space.
Like is there any money that should pile into any other part financials?
I know you can't, I won't touch it, but that we have on our radar.
Maxim is like another you know, chips company that comes up every once in a while. I will leave it there because I don't want anybody to end up trading on my on my stuck advice. But but you know there are others in the space, and you know, uh, frankly arm is a publicly listed company right now. They like they market their IPO on the hopes of an AI bump, So like there's another one that could be a potential play.
Our producers, right, we have to have you on. That was great.
Thank you so much, Bloomberg News Managing Editor of Technology and Global Security, Linda Want, Thank you so much.
Lynn.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business app, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including top travel destinations this year and folks, it's not only.
About people heading to Italy, know that there's anything wrong with that.
Plus, speaking of travel, for all you ski buffs out there, we speak with ski legend Body Miller about his new ski company that could jump turn the entire ski industry.
And we revisit the most anti climactic New Year's Eve of them all. Y two K, we're taking a trip yep, back to nineteen ninety nine.
And speaking of trips, first up this hour this week, we headed to California Forever. It's a massive project funded by a bunch of billionaires. You'll know their names, venture capitalist Marc Andreesen LinkedIn co founder Rie Hoffman. They've all spent about nine hundred million dollars together to buy sixty two thousand acres in Solano County, California. It's just northeast of San Francisco, and full transparency.
They haven't built anything yet, but their plan is to create a new city that's self sufficient and sustainable while addressing the Bay Arias dire housing shortage. The vision is a walkable community.
So easy, peasy right now?
Oh yeah, development in California always so easy, Not so fast. The plan has sparked fierce opposition from local residents, farmers, and politicians, who accused the developer of using shady tactics and suing those who stood.
In the way.
Writing about it in what was a most read story on the Bloomberg this past week, Bloomberg News California Bureau Chief Karen Breslau, who joined us from her car.
I have pulled over. I'm across the street from the future City, which is now just these these enormous wind turbines. It's actually a beautiful day out here. It's it's been raining, so everything's green and the sky is blue, and the wind turbines are turning, and it does look it does look quite idyllic.
So piece of cake. They can build it, no.
Problems, no problem.
It's nineteen degrees where we are.
We kind of don't like you right now, Karen, I'll keep it to myself, okay, So tell us about this project, give us a little bit of the who, what we are, and why, just for those who might not be familiar.
Of course. So we're in Solano County, which is of the very excerbs of the of the San Francisco Bay Area. This is still a largely rural community, some subdivisions, and we're about halfway between the Bay, between San Francisco and Sacramento. And this area became a subject of fascinations Solano in the last few years. A mysterious land buyer started snapping up parcels of land for often very inflated prices, and
nobody knew who this individual was or individuals. They were operating under a mysterious name Flannery and Associates, which has just taken off a street sign in this in this county. And they were basically the investors were outed last summer.
And it's all the boldface names you mentioned. It's it's Mike Moritz, Loreene pal Jobs, Mark Andresen Reid Hoffman, who's who of Silicon Valley investors, And they poured what we now you know, so far nine hundred million dollars into a as yet unseen new city that will be you know, literally supposed to be, you know, stood up in what are now you know, fields used for grazing and wind power. And the idea is to build this green new city. It's part of the new urbanist movement, which is to
have walkable neighborhoods. In introducing their plans today, you know, the developers, the planners talked about creating what sounds like a dream to most Californians, which is a place where you can walk to anywhere you want to be in any given day in ten minutes. So that could be your job. It could be your child's school, it could be a library of barbershop, a cafe, or your place of employment or your own small.
It's very left fron City, Like I think about that concept prought back right, Like you know, Sam left Freck and I cross the water from here in Jersey City, downtown Jersey that whole idea that they left Rack did the same thing the family. This whole Newport area where you could live, work, there are schools, everything you could.
Coldly get to.
Would Karen talk about the opposite thing, Yeah, talk a little bit about opposition and how this is going to a vote now.
Yeah, So there are the reason that the opposition is very important is because in California, and particularly in this county, it's governed by a land use measure that was designed in the nineteen eighties to prevent sprawl. And so none of this land is zoned for housing or manufacturing or you know, technology or any of the things that the that the planners would like to have. So they have to go to the voters and get their approval to
change the county zoning regulations. The problem here is that they have alienated already some key constituencies. One would be you know the farmers who who comprise a large part of the population here, and as you mentioned in your in your intro, you know, the organizers, the developers have sued several of the farmers claiming collusion and price fixing simply because they wanted they didn't want to, you know,
they wanted a high price for their property. Once they saw that that, you know that the farmer next door got more. So it's kind of supply and demand. So there's a very contentious lawsuit. They've also terribly irritated two local members of Congress, John Garmendi and Mike Thompson, who represent this area that are very close to Travis Air Force Base, which is the largest air force base on the West Coast and a key gateway to the Pacific.
So there were some national security concerns when they were in stealth mode. And then the conservationists in this area are wondering, why would you not infill the existing small cities in this county rather than carving a brand new one out of farmland. They're accusing the developers of creating sprawl or planning sprawl, rather than you know, this utopian green city, which is what they unveiled today.
Who These are venture capitalists, you know, they're used to putting money into things and making an incredible return. Is that the plan for this city? I mean, cities are public good they're owned by the residents. Any one, how does the governrice work here? We have about a minute left, but explain how that would work here?
Yeah, so that the planner of this whole operation is a thirty six year old guy named Ian Shromak who's originally from the Czech Republic and has spent some time in gold and socks, you know, some startups. You know, how's the Silicon Valley thing going on?
And he.
Keeps saying, you know, my investors, this is patient capital. Well, if there's one thing, Silicon Valley isn't known for its patient capital. But trumk, it's the planner he's talking about, you know, a fifty year time frame before this community is fully built out. And so this is not I mean, you know, he said, I hope I'll retire off of
this project. This guy's in his thirties. So the time frame for building a city, you know, in history it's centuries or millennia, and in this case they're talking about fifty years, which is pretty fast by city building standards.
But that I think that is really one of the unanswered questions is what, you know, what kind of return on investment are they expecting and what is the timeframe is to prove a concept, which is that we can go back to the you know, go back to the future and recreate American walkable American cities like we saw, you know, in the early nineteenth century. There is there is a kind of a nostalgia piece to this when you you know, fused with green energy.
We would love to talk about forever. You've got to come back, get back to your reporting. We really appreciate you joining us. Bloomberg is California Bureau Chief Karen joining us from Solana County.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.
Were airlines dots falling for another day this after they got absolutely hammered on Friday. Back then, Carol, the SMP gage of airlines declined the most in nineteen months United's all, more than ten percent Delta fell nine percent. American Airlines fell nine point five percent. This all a result of Delta lowering its profit forecast for the full year, which really understand, of course, the challenges the broader industry faces when it comes back to recapturing that pre pandemic performance.
Yeah, like you said, the group overall down seven point six percent on Friday, then another one point three percent in today's session.
All right, so concern lingers.
Even after what was the busiest day ever for US air travel just a few months ago. We're talking about the Sunday after Thanksgiving, So all right, what's going on?
Yeah, Haley Berg is back with us. She's lead economist for the travel app Hopper. That app analyzes trillions of data points i e. Prices on flights, car rentals, and hotels to make predictions about how much tickets are going to cost. Haley joins us on Zoom from Boston. Haley, good to have you back with us. So what gives here? Because Hopper says that more than three quarters of Americans are going to spend the same or even more on
travel this coming year. So why are we hearing the gloominess when it comes to airlines?
You know?
One of the biggest sticking points for prices in the last three or four years has been supplied. There have not been enough seats to book, and that's why fares have been so incredibly high over the past few years. Think back to some twenty twenty two domestic airfare the highest that we had seen in all of our history at Hopper. So supply is now exceeding where it was in twenty nineteen. A lot of it is exceeding now on international routes. So part of this is just the
equation of travelers are looking for low prices. There are more seats available to books, so they have more options. A lot of those options are low cost carriers who may have entered or expanded in the last two years. All of that is putting downward pressure on prices. Despite the fact that fifty percent of our users at Hopper are expecting to travel more this year than they did last year.
Is that true domestic versus international travel.
Yes, we're seeing a tremendous amount of demand for international travel, especially among younger travelers, and they're not just hitting the London and Paris.
Of the world.
They're really going to more off the beaten track destinations, destinations where there might be deals or just more unique experience, and says, so still very strong demand on international capacity there has been slower to recover. Prices to Europe are recovering because we've seen capacity added back there. Prices trans Pacific very different story. They still remain thirty to sixty percent higher because capacity has been slow to recover there.
What about when it comes to other parts of the travel experience? Hotels? I couldn't believe how expensive hotels were in the fall when Carol and I were traveling, but it was so I couldn't believe how expensive it was. What's it going to look like this year?
You're not alone in feeling like accommodation prices have been incredibly high. They have been, and we're expecting them to stay about the same this year. If we do see improvement, it would probably be towards summer or the second half of the year. But yes, demand for travel remains high, and that means that hotel stays vacation rentals, especially in those peak markets, they're selling out, and that means that if you're not booking far enough in advance, you're probably
seeing an incredibly high prices. What We always recommend is for hotels in particular, if you're headed to a big city, book at the last minute, that's when those perishable rooms are going to go on sale. You're headed to a leisure destination, you go to Miami, you're doing a spring break trip. Book that very far in advance, couple months, because that's when prices will be lowest, when that availability is still high.
What are you looking at, Carol, No, I'm just kind of now I'm thinking, are you think No, it's just interesting and I just wonder you know what you're seeing. We've got a great chart for our folks who are watching on YouTube and a streaming service.
I'm just not sure.
So if you're basically it says, if you're thinking about the main vacation plan you want to take in twenty twenty four, and this comes courtesy of our Bloomberg Intelligence team, if the costs exceeds your plan budget, what will you do? Twelve percent are going to look for a cheaper destination, fifteen percent are going to look I guess at attractions and maybe what they're spending there. Forty five percent will increase their budgets.
Oh that's just tax and if you're just listening to us and not watching. The forty five percent is like, you know, the possible changes of your budget ex seeds plan. The majority of almost the majority of people, almost half the people said they'll just increase magic.
Yeah, I mean that's bullish, but yeah, it's bullish. But it's also interesting when we just did a story about where if people found that they had what a ten percent.
Bump in income er, Yeah, they pay down debt.
They're going to pay down debt. So help me.
Are you talking about I don't know what are you seeing? Higher end traveler, a bigger pocketbook, lower end?
Is there any differences?
There are a few things happening. So our Hopper users are primarily millennial in gen Z and seventy seven percent of them say that they are going to spend the same or more on travel this year. And there's really two schools here. One is our millennial generation. They built wealth. They are coming out, many of them of a few years of savings. Those who were in advantageous positions headed
into the pandemic. They are spending more on travel. A larger proportion of their wealth is going towards trips, vacations. They have credit cards that allow them to gain points. The more they book they are loyal So this group is absolutely spending more and traveling more. And then on the flip side, we have incredibly priced conscious travelers more
on the gen Z and what they're doing. They're taking their travel budget and they're saying, can I get two trips out of my budget from last year that might have been one trip?
And we often see this.
Travelers are skipping the trip to Miami and they're going to a destination in Puerto Rico that might be a whole lot less expensive and flight and in country expenses, So there is some optimization within the budget. That's absolutely happening. We see that a lot among Copper users because they're very pricensit.
Okay, very briefly, we have top domestic and top international locations. Your top domestic locations. We got a list of them. We're about to show on the screen which one sticks out to you of these five.
Here, I would say that Orlando is always a big one. It's popular, not just for those Disney trips, but all so for Port of Orlando starting on cruises, which as we know, are coming back you know, in the last year or two. So Orlando's always a big one, in part because no matter how much demand we see going there, prices are low. It's inaccessible and affordable place.
To visit and international.
Your top international locations Cancun, Mexico, Dominican Republic, London, England, Rome, Italy, Tokyo, Japan. That's kind of a mixed bag. Just got about fifteen seconds left.
Any thoughts on that those tropical destinations are inexpensive alternatives to some of those longer hauled trips. But really this year is going to be all about Tokyo and the return to Asia.
Wow.
Wow, that's cool to do.
That's interesting. Where are you going me?
Yeah, we don't have anything planned. Oh I'll probably go to the American West.
Oh that's what you said that earlier.
All right, Haley Burg, lead economist at Hopper, Thank you so much.
That was fun.
This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Well, each fall, Bloomberg Pursuits does a ski takeover. They highlight where to ski and what gear to use for the upcoming season. So in last season's takeover, we sent BusinessWeek contributor Gordy Megros to trough out some skis from a new company called Peak Ski Company, based in Montana,
co founded by ski racing legend Body Miller. So here's what Gordy wrote after spending all day on the skis, Carol, Typically skis require a certain amount of speed and pressure to engage the tip and initiate the turn, but these carved without having to apply that force at speed on the steeps. They held the turn like a race ski, and in bumps and slush they were quick and forgiving. Not once did I feel off balance, he continued. Anybody
could use these skis. Beginners would love them because they're easy to turn. Experts would two because they still can ski aggressively and feel solid underfoot.
It's a great feel of what these two gentlemen are up to. So let's talk more about the skis with the co founders of the company, Andy Worth and Body Miller. Andy also CEO and president of Peak Ski Company. He joins us from Bozeman, Montana. Body, by the way, of course, you know him, Olympic and World Championship, gold medalist many times over and the chief innovation officer at Peak Ski company. He joins us on zoom from Big Sky, Montana. Guys, so great to have you here with us.
Body.
Let me start with you.
How did this all come together to create Peak Ski and why did you want to do it?
Well, I've been obviously in skiing since I was grow a little and had exposure to a lot of different companies, started on K two and ben Fisher, then Rosen Goold and Atomic, then Head for eight or ten years.
So being in the race rooms and.
Seeing the economics of the way the ski companies worked and the challenging aspects of the construction method was kind of frustrating for me. It's pretty, it's pretty, it's pretty analogue, and they're sort of stuck in a lot of ways. We didn't really change much in the ski world. We were changing skis all the time, prototyping, but just watching what was happening in the consumer market and then sort of understanding the business model of you know, those companies
as I was with them. It was it seemed really unlikely that I would go into the hard goods side of the business. I know Andy felt the same way. We both kind of came into this as skeptics or contrarians, but as we dove into it a little bit more. I mean, I always wanted to bring better skis to
the consumer market. There's a big gap between World Cup skis and the rest and World Cup skis, granted, are specifically designed for racing and hard snow, really smooth, you know, perfectly prepared hills, which obviously wouldn't apply as well to your consumer, just because the hill's always a little messed up, puffs the.
Snow and nothing as manicured like we get in World Cup.
But my goal was to bring really good skis to the market. And then as I sort of Andy and I evolved through this, I had a connection with a company in Germany, a good friend of mine, and I'd always wanted to sort of modernize the manufacturing process, and I think I don't know that Andy and I would have done it had we just had the model of doing what we're doing right now, which is, you know,
building skis and selling them direct consumer. It's a fine business, but it's the scalability is a little bit problematic in this case. The real sort of enticing part was re engineering the manufacturing process so that instead of forty five minutes to build a ski and it's glue and they you know, for those of you who don't know, it's a bit like making a sandwich. They call it a sandwich construction. It's a lot of different layers laid up with blue or pore impregnated with blue, and then you
compress it and cook it in a press. It takes about forty minutes or so right now, which is why they've been building skis for next winter already right now, because that's how long it takes to build a million pairs of ski set.
And we have a manufacturing process that.
We're in the in the in the works on where we can build a ski in somewhere around ten seconds and no blue, so we'll be able to recycle it the same machine that it constructs it will take it apart and we can retask those materials. So well, that was the part that really got us excited. That was sort of the why of doing this.
I want to talk we'll talk, Yeah, I want to talk more about that.
But I hopefully that's what that's where the home run is.
I want to bring in Andy Worth here because he's a many your veteran of the ski industry, having run some huge mountains here in the US Squad Valley for many years, worked at Interest before that. Andy, U talk about the business here and the financing of this. It's a little confusing to me about who the investors are and who you raised money from and how much money
you've raised. So give us the details on the business side here, and you know the reception that you've gotten from as you go out and try to raise money for this.
Thank you very much for that lead. But I didn't I should have thought you guys were going to refer to Gordy's article on us. We were recipients of that in November pleasantly and certainly a respected writer and certainly writing for Bloomberg. That's a great lead out relative to the business. As Body and I Body mentioned, we were both retired about four years ago. I worked in the private equity world and also running a bunch of ski resorts.
As you know, we came out this business with ventrarian approaches. The understatement skeptical in many ways. But after doing a great deal of research and realizing that what body had in his mind was something that could provide an exceptional product, new type of product to the market. And we had these strategic initiatives on which we were working and we commenced building the company, standing it up so to speak,
and launched in April last year. And Tom, to your point, we had established an initial pre cash valuation based on pro forma EBITDA on a three year basis and pretty contemporary multiples from what I was able to glean from other companies. That pre cash valuation was thirteen million small company. And then we raised completed eight million dollars raised about gosh three four months ago, so postcash twenty one and in this case we're currently raising funds through Republic Capital.
This is crowdfunding, basically a safe note, and it has our enterprise value at thirty five million. The reason being, Tom, is the we have a clear line of sight now on these strategic initiatives. The core of the business are the skis and that's what prompted and supports that initial fund raising effort and the valuations to which I mentioned that I referred to. In this case, we're starting to get a clean line of sight on the three strategic initiatives,
which include technology integration. It's extreme innovation across all levels. But technology integration through peak Locate, which is this proprietary device we're inserting in the skis Wait.
Wait, so.
We're bloomber.
So we get a little wonky about the financial side of it. So it's interesting, So do you guys continue along these ways? Is there venture capital money also in it? Is the goal to eventually go public?
Like, how do you think about it?
Andy, Yeah, No, A great question, of course, and not surprisingly on this format. But I think really we're focused on right now is advancing on these strategic initiatives, and then lessons learned in other acquisition environments in my old career is We're going to advance on these initiatives and I can get to the point where we can generate substantial value for our current investors and investors coming in
through republic. In this mechanism, we don't have a you can't speak to any exit strategy because we're focused on an execution right now. Yeah, but we know that we can take the value of the business right now thirty five million up substantially from here.
Well, it's interesting, but it come on back in because Tim and I were talking when we were prepping for this, because Tim's a ski are really into this. Were you guys profitable, Like it can be hard to go up against the establishment, and you learned a lot about the industry and the mechanics and kind of I love what you said the economics of the way ski companies work. You probably learned a lot about it, which can be tough to go against though. Also so I'm just curious,
were you guys profitable in the first year? I mean, how are you looking for about it? And we've got about a minute then we're going to come back and talk some more.
Okay, go ahead.
The typical sales channel that everyone's locked into is really the problem. So Andy and I addressed that by going direct consumer profitability. We ended up not being profitable year one, which was frustrating, but also given the nature of startups, was not terribly surprising. But the margins are really good when you sell direct. Obviously, the margins are much better. You don't have to sell two hundred thousand pairs of
skis to be breaking even. So I mean, Andy, I'll let you fill in, but the really positive stuff we took out a year one outweighed the fact that we had some quality control issues and just I guess you'd call.
Him growing days.
Well, and hang on for a second, because we're gonna we've got to do some news and we don't want you to get cut off, so we're going to continue this and get you to weigh in on that aspect of the business.
When we come back.
We're talking with Andy Wirth and Body Miller, as we said of the Peak Ski Company co founders. Andy also CEO, Body also chief innovation officer. And there was a great story that was written by Bloomberg business Week that really gives you details about what they set out to do, what Body set out to do, and it is interesting.
I love when you know he obviously has learned a lot about the business and how they were doing it, and just this idea of being able to manufacture much more quickly changes the mathematical business.
And also what skis worked for him when he was young, when he was racing. So we'll get into all that. Let's get right back to Andy Wirth, CEO and president of Peak Ski Company, and Body Miller, Olympic and World Championship gold medalist and the chief innovation officer at Peak Ski Company. They join us on Zoom from Montana. Buddy, I want to go back to you because I was struck when you said after the first year you were
frustrated about not being profitable. But I mean, it's really tough for a startup, and I think the expectation to actually be profitable after one year. I mean, look at Amazon, for example, it took more than a decade to regularly become profitable quarter after quarter. Why were you expecting to be profitable after the first year.
I'd sort of.
Touched on the margins, the margins if we'd you know, that we didn't model out quite a bit. Andy's a bit of a quant and you know, I always like to to sort of use all of our experience and knowledge it and feel like either of us were very naive coming into this.
But the margins on our on our product are good, and we're.
Selling right in kind of the sweet spot of where you know, they typically net out for a high quality, you know, small handmade ski company. But the challenge was was quality control. It's just it's a byproduct of the manufacturing process itself. It's just very inexact. You're using materials that have variances to them, and the assembly process is pretty as I said, it's analog, and so there's us being direct consumer.
We didn't feel like we had the.
Latitude to give anything but perfect skis to people, so we ended up with a lot. I don't I think it was close to thirty percent of our inventory didn't pass the QC inspection of the manufacturer. So it wasn't enough snitpicking. It was just the reality and that that was way outside of our modeling.
And you know, that was tough.
But the great news is we sold. We sold through, you know, mid ninety percent of the inventory we had, which was basically, you know, above or right the ear where we projected. So all of our projections that we could control were good, and that would have led to profitability. The part that was the problem was we didn't have
the inventory to sell to get our numbers. But you know, again, that's part of the inspiration or the drive to re engineer the manufacturing process because everybody wants better stuff, quicker, cheaper, and more precise, and that's we're sort of delivering.
Hey, Andy, come on back in here, because you're building this business with Body. I'm wondering where else you can go here? Because I know you guys were talking about doing a Body Miller Ski academy. You end up pulling the plug on the Gramby Ranch location in Colorado back in twenty twenty two. Where else can you guys go as a partnership.
Well, kind of the sky's a limit. As they say, we neither of us feel like retired guys nowadays. I can tell you that's for darn sure. We come at this business, in this effort with a great deal of passion for the outdoors the mountains, certainly from the ski industry. Different angles of attack, but similar ethos and way of approaching things. There's a couple of different ventures that we
have that we're taking on and considering right now. All of our emphasis and focuses on Peak, and the primary reason being is coming back to this re engineering of the entire process by which skis are made that puts us in a position to be three four years down the road having our machinery process that we with a smile on our face, we call Treadstone because it is, you know, fairly confidential information that we're working with with
this group in Germany. But nonetheless it's it's something that we anticipate be in a place where we can have thirty thirty five forty percent of the world's market share made on our machines and our process. And that is where when I mentioned value creation, that's where it comes into play.
So does that mean Andy, you'll be making you guys will be making skis for other companies, other brands.
Yes, ma'am. In fact, it might be interested to know my best effort at Yogi Bearism is the least important thing about our company or the skis, but they're critical, and the reason being the skis are critical. But at the same time, we're in this to the innovation for the innovation on so many different fronts, including the process.
Right. So body, it's like becoming the Luxotica of skiing, right, Like, you don't care what the brand is, but if you can improve the process, that's okay.
Or being like a what is it a founder talking about?
Yeah, you're talking about really established companies. But the irony is besides it's attaching and incredible people. Andy and I are big fans of many of the companies that we're competing against, and in this way, We're not looking to steal market share from them, because at a certain point it becomes annoying to manage logistics. In this case, our goal is to have ten purchase orders and be delivering
two million pairs of skis, and they advantage that. I think I don't see it stopping there, because we can deliver them for twenty or thirty or forty dollars less than they make them for themselves. Now, Plus they can divest of all their other sort of liabilities. Even though a lot of their equipment's amoritized.
They're just they.
Understand that there's a lot of fluff there, there's a lot of loss.
We can we can clean that up as well as there's things like gray market skis that you know, there's a little bit of the inventory is out of control.
So I think I don't see it stopping.
I can't see a company saying, hey, build us these five hundred thousand pairs and we're going to build the other five hundred thousand for forty dollars more and deal with percent way.
Yes, their accountenants or the whole financial team might say, oh wait, I mean let's talk about that, guys. The impact of climate change body and the lack of snow. How are you incorporating that risk and reality into your business? I mean, we've finally seen some snow here in New York City, but it's barely a sprinkling here. But innovating with the idea that more and more skiers maybe skiing on man made snow, how does that come into it?
And body? We've got about thirty forty seconds here.
Yeah, it's you know, it's just the reality that we're facing. I think the ski industry is remarkably healthy. You know, I don't think it's an immediate thing for the ski industry. I think it's certainly important that we'd be dealing with it and addressing it, and in our company, recyclability of the skis is a huge part of the technology we're working with as well. So, you know, I think I
don't see it being a massive problem. But you are going to have years like this year where it's been really tough at the beginning of the season's been tough.
But do you innovate differently body, Do you make different types of skis because of maybe more man made snow?
No, not really, I mean you think a man made snow is on piece you know, and then there's off piece skis, and yes, the trend has been going much wider, so we certainly address that end of the market where it's on groomers on piece skis, but the reality is there's a huge demand across the board.
Right, Hey, Andy, we got about thirty seconds left. I want to give you the last word here and just ask you what's top of mind as we begin the year here and you guys are trying to build this company.
I appreciate that, Tim, and it got to augment with point here is that the climate change matter is something that's an exigent threat for us overall. And what we do is number one, we reduce our footprint. Number Two, we're doing everything we can with this process to actually localize where skis are made. And so that's a pretty
substantial contribution in favor of that. But relative to Peak and what we're doing emphasize the fact that we have Body and he's got this brilliant mental level, creative mind that is unique. It's almost like Chuck Yeger working. It's Lucky Martin on the mock Capable airplane back in the forties. He's got this unique ability to be an engineer but at the same time put those well skid on snow that what enables us to take up this all over.
The nice compliment.
Very cool. Thank you guys for joining us. Andy Worth, CEO and President of Peak Ski Company and Body Miller, Olympic and World Championship gold medalist and Chief Innovation Officer at Peak Ski.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.
But Carol, you remember y two k right?
Really?
Really?
Heod We were actually working here at Bloomberg.
Yeah, I think I just started.
And one of the things that we were thinking about big time was what happens when we go from nineteen ninety nine to two thousand and Apparently that can be somewhat difficult, sophisticated, complicated when it comes to technology and computing devices.
Like what does that mean?
Right?
You go from a year that you specified by with two digits to office and you really needed all four?
Yes?
Hey, can I just tell you that.
We were all of us in the news team. We went home We were given walkie talkies and everything because we thought in case the phones don't work, and we had to be ready for when in I guess Asia, or whenever it struck two thousand around the globe first for like the world to come undone, and I got to sell un like I remember, like we're waiting, We're waiting.
Nothing happened.
Nothing happened. Well, a new HBO documentary it takes us back to that time. It's called time Bomb y two K.
Why two K?
Whyks agreed using two digits rather than four made good economic sense, But.
When workers advanced clocks to the year two thousand, the world could melt down.
Our systems are broken.
We've got a problem with a couple of digits.
This has to be.
Solved, all right. That was a clip just from time Bomb y two K, new documentary on HBO taking us back to the years ahead of Y two K and all the chaos and prepping and fears about power grids, family nuclear arsenals being at risks, planes falling out of the sky. People were very worried. Carol Well, Brian Becker, and Marley MacDonald are the documentary filmmakers and producers behind time bomb y two K. They join us on Zoom
from New York. Good to have you both with us this afternoon, Brian, I want to start with you, why make a documentary about Y two K? Twenty four years later?
So, when Marlee and I first thought of this idea and started looking into it, it was the summer of twenty twenty, and the first images you see when you google back y TK are shots of empty grocery store shelves and people checking out pallettes of water and toilet paper at the supermarket, and people in line at the gun store. And those images felt awfully familiar to us, as given the reality we were living through in the
depths of the pandemic. We knew there was a countdown, We knew from our research that there was extensive footage and media coverage of the event, and kind of living in that moment of the pandemic made us realize that it wasn't just a countdown. It wasn't just something that we lived through and then had mostly forgotten about. It also had we thought lessons for our present moment.
Well, I gotta say, Marley, I just remember doing interviews, you know, leading up to it. In every conversation certainly if it was even just a general market and interview, it was like, okay, so how are you guys planning for Y two K? And concerns that you know, if things come undone and you know we can't track investments or market stone, you know, work properly. Having said that, when you and Brian went to pitch this, where people like, wait, wait, what was Y two K?
Because it's a long.
Time ago, definitely, well, everyone who lived through it remembers it, which definitely works in our favor when pitching this around and was a really actual part of making this project. When you tell someone you're working on a movie about Why Duke, everyone has to tell you what they were doing New Year's Eve nineteen ninety nine.
But I just tell you one of my producers I think, was in kindergarten, so that kind of like at home. Anyway, continue please, Yeah, Brian.
And I became historians of what everyone was doing on New Year's Eve nineteen ninety nine. But when we first started looking into the project, you know, the first question that comes up is was this a joker? Was this real? And you know a lot of people remember why cho K as a hoax? And it took us months of research to come to the conclusion that it was a
very real problem that was solved. And we did that by talking to a lot of computer programmers and talking to a lot of people who actually worked.
On the issue.
And so we knew we could kind of reclaim this narrative in this movie and shine a light on all the work and labor that went into actually fixing this very real problem.
Mart Marley, can you talk about the style here? I enjoyed, I enjoyed the film, but I was so prize to see the way that the documentary was structured in the sense that there's no narrator, and it's nobody looking back or remembering, or there are no recollections. It's purely based on archival footage on videos that were sold at the time. News reports, home videos talk a little bit about building it in that sense.
Yeah, So we knew we wanted to do it all archival from the jump, because one, there was just enough footage. There was a lot of footage, and when we first started working with the material, we realized that, you know, everything was sort of there, and that if we kept it in the world of all archival, we could really kind of make this countdown feel more present, tense, feel like a time capsule of that actual moment. And Brian is an archival producer and found you know, along with
our team all of that footage. We ended up with over seven hundred hours of footage, And as far as the structure of the film goes, we knew that we wanted to sort of replicate the way that Y two K worked in the world. So starting with the technical problem watching it sort of radiate out of cubicles and into the social consciousness, and then follow that to sort of the fringes of America, And we knew we had to get to midnight.
At some point as you went through the footage and you guys were gathering at Brian, I mean, what was it that kind of jumped out? Was there certain things that like, oh my god, Like it was just kind of interesting because there was real nervousness about how there's my play out?
Yeah, I mean there's a certain attraction always to footage that is kind of unbelievable to watch in the present, whether it be you know, a tape made by a militia.
Titled why to K?
Why Should I Care? I don't even on a computer. But I think what we really started looking for most specifically in the footage were moments that could clearly tether us from present to past, because we didn't include interviews with individuals in the present day. We were looking for kind of moments of emotion or introspection or relevance between
them and now. But of course, you know, when Matt Damon is recorded speaking about the nuclear arsenal and his fear of the nuclear arsenal potentially shutting down, you kind of have to also include things like that in.
Your movie, A very young Matt Damon promoting at the time the talented mister Ripley. I should note, Hey, Brian, did you hear have you heard from any of these folks who were featured in this Yes.
Thanks for asking that we actually have relationships with all of the individuals who we built scenes.
Around in this film.
It didn't feel fair for us to include their historic likenesses in our feature without talking to them first to gauge what Y t U K meant to them. So, for example, Peter Diager, who is one of the first individuals who kind of brought White TK to the public's attention. I spent two days in his basement with him outside of Toronto. He just published a new book focused on computer management. And we just appeared on Peter's podcast about y TUK, which I can plug here. Candace Turner, who
in the film calls herself Farmer Jane. I emailed with Candace this morning and I went to her farm in Sarcoxi, Missouri. She moved there or she lived there in events in the lead up to y TK, and she still lives on that very same farm. I went to her mud room and came back to New York with some VH tape VHS tapes of hers toscin ins in d C. So we do have relationships with these people.
You know, it's interesting, Brian and Marley that it's been a week where Tim and I have been talking a lot about the risks.
In twenty twenty four.
We certainly did at the end of last year and into the new year, but this week, you know, some of the concerns were big time. The November elections and basically the US against itself geopolitics certainly came up, and it made Tim and I think about how your documentary kind of ends up. We're essentially just before midnight in
the US December thirty first, nineteen ninety nine. You have Boris Yeltsin, right, conceding power to Vladimir Putin, who would take over to lead what was then what the Soviet Union, Right.
It was just Russia. Yeah, and there's this ominous sort of moment from the newscaster that says, you know, Putin wants this to be a strong Russia, but has no ambitions beyond like for expansion and to get bigger.
Here we are twenty four years later, and we know that that's very different.
But I do wonder how you guys are thinking about having gone through this process, about some of the risks and the concerns that are out there today, and coming off a global pandemic that really made us all realize whoa our life can change dramatically, and our lives are at risk.
Yeah, you know, it's an interesting thing. So our movie actually premiered at a festival last March, and during the Q and a's at that time, a lot of the questions were relating our film to COVID. Then sometime over the summer, the question started to become about the threat of AI, and so it's interesting to kind of see how.
This movie moves through the world as.
It continues, you know, going through different existential threats, and that's I think what we wanted to do with this film is really examined the ways in which America faces existential threats and kind of the focus on how interconnected and dependent we are on each other and really highlighting that aspect of getting through things like Y two K or.
COVID time, I think that we collectively go through an experience that will somehow bring us closer together as citizens. I turn out to be wrong. I felt this way during COVID. That's sort of like everybody was in this together and it would be in this uniting force. And I look at the landscape right now, Brian, and I think that we've never been more divided ever than we have been right now.
I feel the same too, Tim. Why two K almost feels like this dry run in which we actually did succeed in solving a problem and then, of course, in very American fashion, quickly dismissed it as a joke or as a hoax after we went through it. It almost feels as if we worked on it so well and solved it to an extent that we would have learned more if more things went wrong after the clockstruck midnight
on New Year's Eve nineteen ninety nine. Instead, we kind of missed this opportunity to think so much about how our lives had come to depend upon technology and also on each other to an extent.
You know, it's kind of interesting on a day where safe to say, we all got fooled about the approval by the SEC of a spot bitcoin etf where a headline crossed on Twitter from the official SEC account, and then ten minutes later the chair of the SEC comes out and said, Nope, that's not correct. They have not received approval and that the SEC Twitter account was compromised.
You just realize how quickly and how vulnerable we are and reliant on technology, and how things can be misconstrued, got wrong, and you just, I don't know, when you start to extrapolate that, you just wonder kind of tim where we could go with this.
Yeah, and also, you know, it was so interesting to see that the way technology is shifted, and you know, it's been a quarter century roughly since this time period, but the technology shifts that we've seen have been absolutely massive. Yeah, Marley at also Alliance, Yeah, Alliance is, and it's and there's this picture. There's a picture painted Marley in the
nineteen nineties about the optimism about technology. And I'm wondering if you think that the optimism that these folks in the nineties talked about and alluded to about school children being able to access information at any time has actually manifested in something that looks optimistic or looks, you know, scary. I mean, there's there's talk about parents being concerned about TikTok, mental health and social media, government control of this stuff. I mean, what are your thoughts there?
Certainly I'm I'm very concerned with the state of our relationship to technology, and I think that was something that we really wanted to sort of capture that techno optimism of the nineties in our film. You know, this was the first time that people were really welcoming computers into their lives. You know, it was at their office or
in their home for the first time. But I think what YGK revealed is just how dependent we actually already were on computer systems that we weren't seeing, you know, to get on the train or how we get the news in the morning. Like everything had already been kind of operated by these giant systems, but we hadn't come face to face with that. So I think y GK was an interesting moment for kind of deconstructing our reliance on technology. But yeah, as far as where we've come today,
you know, we've only gone deeper in that hole. Like Brian says, it could have been a moment where we had pivoted and maybe taken a different route. But because we did get in front of the problem and solve it, we've just gone further and further down this road. And if something like this were to happen today, you know, the same questions would arise.
Hey, we only have about thirty seconds left, Brian, But I want to give you the last word. What's the next thing you guys are working on.
I'm working on a film about the rise and fall of the American Enclosed shopping mall. And Marle olpasity to describe what you're.
Working out I'm working on. I'm developing a film based on the archives at the Museum of Natural History and the origins of natural history museums.
Very cool, big thank you to both of you for joining us. Everybody check out the new film. It's on HBO. It is all about y two K. It's called time Bomb.
Y two K.
A big thank you to our guest Brian Becker and Marley McDonald, documentary filmmakers and producers behind time Bomb.
This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you get your podcast. Listen live weekday afternoons from three to six Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg journalone